By Phillip Mitchell, Founder & Chief Brokerage Officer, AIExchange.club
Stage lengths are our own estimates for a small software or app purchase, not promises. Sourced figures are linked in the text, and the worked example is an illustration, not a real deal. This is general information, not legal, tax or financial advice.
Buying a business takes nine steps: decide what you want, build a team, find and screen listings, sign an NDA and talk to the owner, make an offer, check everything (due diligence), sign the purchase agreement, close and move the assets, then run it for the first 90 days. For a small software business, plan on about 2 to 3 months from a signed offer to the close, and about 3 to 6 months from a standing start.
Most guides stop at the list. This one gives you the time each stage takes, what it costs, what to check in a software business, an illustrative deal from start to finish, and a free planner that turns it into dates for your own deal.
The steps at a glance
| Step | What happens | Typical time (our estimate) | Who does it |
|---|---|---|---|
| 1. Decide what you're buying | Set your size, profit, owner hours and budget | 1 to 2 weeks | You |
| 2. Build your team | Line up a lawyer and an accountant | 1 to 2 weeks | You |
| 3. Find and screen listings | Browse, screen, shortlist | 2 to 8 weeks | You |
| 4. NDA and first call | Sign the NDA, ask the seller your first questions | About 1 week | You and the seller |
| 5. Value it and make an offer | Agree price, structure and exclusivity in a letter of intent | 1 to 2 weeks | You, your lawyer |
| 6. Due diligence | Check revenue, customers, code, contracts | 3 to 6 weeks | You, accountant, technical reviewer |
| 7. Purchase agreement and financing | Draft and sign the contract, confirm funding | 2 to 4 weeks | Lawyers, lender if any |
| 8. Close and transfer | Fund escrow, move every account and asset | 1 to 2 weeks | You, the seller, escrow |
| 9. The first 90 days | Learn, fix the biggest risk, then grow | About 13 weeks | You |
Step 1: Decide what you're buying and what you can spend
Write a one-page brief before you look at a single listing: the revenue range, the minimum profit, the most hours a week you'll work, and the churn you'll accept. Then set a budget that includes a cash reserve for the first 90 days. Decide how you'll pay: cash, a seller note, a bank loan, or a mix. Our guide to financing a SaaS acquisition covers the options.
Step 2: Build your team
You need a lawyer who has handled small asset purchases and an accountant who can read a software revenue report. Some buyers add an adviser or broker. Costs vary by firm and by deal, so get quotes before you commit.
| Cost | What to expect |
|---|---|
| Professional valuation | Up to $5,000 or more, according to Bench |
| Lawyer for the purchase agreement | Ask for a quote, and ask whether it is a fixed fee |
| Accountant for diligence | Ask for a quote |
| Technical review of the code and hosting | Ask for a quote |
| Escrow | Included in the seller's plan on AIExchange.club. Elsewhere, ask the provider for its fee schedule |
| Marketplace access | On AIExchange.club, buyers pay $49 a month or $399 a year, with a 14-day free trial. Sellers list free and pay a flat 10% only when the deal closes (see fees and pricing) |
| Financing | Depends on the lender and the terms. Your lender will quote them |
Step 3: Find and screen listings
Start on a marketplace that only lists what you want, such as our AI and SaaS listings, and screen each one in five minutes: Is revenue growing? How much do customers leave each month? Does one customer pay for a big share? How many hours does the owner work? How is it built? Drop anything that fails and shortlist two or three. If you want a faster read on price, our guide to SaaS business valuation shows the multiples by size.
Step 4: Sign the NDA and make the first call
The NDA lets the seller share real numbers. On the first call, ask why they're selling, what they do each week, and what they'd do next if they kept the business. Ask for 12 months of revenue exported from the payment processor, not a spreadsheet someone typed. It saves weeks later.
Step 5: Value it and make an offer
Small software businesses are priced as a multiple of seller's discretionary earnings, which is profit with the owner's pay added back (see SDE vs EBITDA). Decide the price, the structure (most small deals are asset purchases), and how much is cash at closing, a seller note, a holdback or an earnout. Then put it in a letter of intent, with an exclusivity period so the seller doesn't shop the deal while you check it. Exclusivity usually runs up to 90 days, according to Bench.
What's your SaaS worth?
= $120,000 ARR
45% of revenue is typical
Show the math
An estimate, not an appraisal. It can't see your code, your contracts, or your competitive position. Treat it as a starting range.
Get a full valuation →Step 6: Due diligence
This is where deals are won or lost. For small and mid-sized businesses, DealRoom puts a typical diligence period at 4 to 6 weeks. Match revenue to bank deposits, check churn and refunds, see who the biggest customers are, and have someone technical look at the code and hosting. Our due diligence checklist has the full list. These are the red flags we'd stop on:
| Red flag | Why it matters |
|---|---|
| Processor revenue doesn't match bank deposits | The profit the price is based on may be wrong |
| One customer pays more than about 20% of revenue | Losing that customer would change the price (rule of thumb from Bench) |
| Churn is rising | A shrinking base is worth less |
| The owner does everything and nothing is written down | You'd be buying a job, not a business |
| Payment or app store accounts are in the seller's personal name and can't be moved | You may not be able to take over the revenue |
| Contractors wrote the code with no ownership agreement | The business may not own what it sells |
| Model or API costs are growing faster than revenue | Margin can disappear as usage grows |
For an AI product, check the retention and the model bill. ChartMogul's billing data puts median gross revenue retention for AI-native products at 40% (ChartMogul, December 2025), so ask for churn by month and the cost of each user. Our guides to AI wrapper businesses and buying AI SaaS businesses go deeper.
Step 7: Purchase agreement and financing
Your lawyer drafts the purchase agreement, which turns the letter of intent into a binding contract: the assets, the price and how it's paid, the transition help, and the non-compete. Our asset purchase agreement guide explains each part. Confirm your funding in this step too, and ask your accountant about the tax filings that follow an asset purchase, such as Form 8594.
Step 8: Close and transfer
You fund escrow, the seller moves each asset, and escrow releases the money when the transfer is confirmed. Move these before you release funds: the payment processor and app store accounts, the domain, the code, hosting, API keys and model-provider accounts, the customer data, the support inbox, analytics and social accounts. The tracker below has a transfer checklist for exactly this.
Step 9: The first 90 days
In the first month, learn the business and change nothing big. Talk to your top customers. In month two, fix the biggest risk you found in diligence. In month three, pick one growth test with a spending limit. Keep the seller reachable through the transition period you agreed.
A worked example (illustrative)
This is an invented deal to show how the steps fit together. It is not a real business or a real sale. A buyer looks at a subscription app with $120,000 a year in revenue and $37,000 in running costs, which leaves $83,000 in seller's discretionary earnings. At 3.0 times, the price is $250,000.
| Weeks | Stage | What happens in this example |
|---|---|---|
| 1 to 2 | Brief and team | Buyer sets a $250,000 budget and picks a lawyer and an accountant |
| 3 to 6 | Find and screen | Screens eight listings, shortlists two |
| 7 | NDA and first call | Signs the NDA, gets 12 months of processor exports |
| 8 to 9 | Letter of intent | Offers $250,000 with a 60-day exclusivity period |
| 10 to 15 | Due diligence | Deposits match revenue within 3%. One customer is 24% of revenue |
| 16 to 19 | Agreement and financing | Price stays $250,000 but is restructured: $175,000 cash at closing, $50,000 seller note over 12 months, $25,000 earnout if that customer stays 12 months |
| 20 to 21 | Close and transfer | Escrow funded, accounts moved, escrow released. Total about 21 weeks |
The offer-to-close stretch is 12 weeks, inside the 2 to 3 months we'd expect. The biggest win came from diligence: the 24% customer became a deal structure that protects the buyer instead of a surprise after closing.
Plan your own timeline and get the tracker
Tell us a few details about your deal and the planner shows your estimated close date. Enter your email and we'll send the full dated plan, plus the SaaS acquisition deal tracker (a spreadsheet with the task list, the diligence checklist, the transfer checklist and a revenue-against-deposits check).
When could you close?
Frequently asked questions
What are the stages of a business acquisition?
Decide what to buy, build your team, find and screen listings, sign an NDA and speak to the owner, make an offer in a letter of intent, run due diligence, sign the purchase agreement, close and transfer the assets, then run the business through the first 90 days.
How long does it take to buy a business?
For a small software business, we'd expect about 2 to 3 months from a signed offer to closing, and about 3 to 6 months from the day you start looking. Larger or more complex deals take longer. These are our estimates, so use the planner above to try your own assumptions.
What is the first step in buying a business?
Write down what you want: the size, the minimum profit, the hours you'll work, and your budget. A clear brief saves weeks of looking at businesses that were never going to fit.
What should I check first on a SaaS business?
Match the revenue in the payment processor to the bank deposits, then look at churn by month and the share of revenue from the biggest customer. If those three hold up, move on to the code, hosting and contracts.
Why do business purchases fall through?
Common reasons are numbers that don't match during diligence, a risk the buyer can't accept, funding that doesn't come through, and a seller who changes their mind. Clean records and a clear letter of intent reduce all four.
How do I buy a business with no experience?
Start with a smaller business, use a lawyer and an accountant from the beginning, and work through a checklist rather than skipping steps. The tracker and planner on this page are built for first-time buyers.
Next step
If you're ready to look, browse AI and SaaS businesses on AIExchange.club. Buyer access is $49 a month or $399 a year, with a 14-day free trial, and deals run through our deal room with escrow (see fees and pricing). Listing information comes from sellers, so run your own diligence using the steps above.
Browse AI and SaaS businesses for sale →
Own an AI or SaaS business that already makes money? Listing is free, and the flat 10% success fee is only paid when your deal closes.
List your AI-powered business →
Questions first? Talk it through with us.
AI Business Broker | Helping AI SaaS founders secure confidential exits | 2.16M in AUM
Comments (0)
Be the first to share your thoughts.
